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Category: Ad Surf Daily

UPDATE: ASD’s Andy Bowdoin Incarcerated At Oklahoma City Federal Transfer Center

Thomas Anderson “Andy” Bowdoin

Convicted 1-percent-a-day Ponzi schemer Andy Bowdoin is listed as an inmate at the Federal Transfer Center in Oklahoma City, a development that likely means the 78-year-old AdSurfDaily patriarch is on his way to a federal prison. Bowdoin, a Floridian, last year requested to be incarcerated in Florida. The PP Blog was unable to determine immediately if that request was granted.

Bowdoin pleaded guilty to wire fraud in the ASD Ponzi case in May 2012. He admitted ASD was a Ponzi scheme that had gathered about $119 million and had never operated lawfully from its inception in 2006 through its collapse in 2008. Bowdoin initially was imprisoned in June 2012, after federal prosecutors proffered evidence that he continued to promote scams even after the seizure of more than $80 million in the ASD Ponzi case and even after he was charged criminally in December 2010.

In August, Bowdoin was sentenced to 78 months in federal prison for his role in the ASD Ponzi.

Federal prosecutors identified AdViewGlobal and “OneX” as two other scams in which Bowdoin participated after the collapse of ASD amid Ponzi allegations by the U.S. Secret Service in 2008. Like ASD, AdViewGlobal was a purported “program” that planted the seed its paid a daily return of 1 percent. OneX was a “program” Bowdoin said could fetch participants a quick return of $99,000, apparently after an initial outlay of $5.

Bowdoin targeted former ASD members and “college students” in his OneX promos.

In August, the SEC accused Zeek Rewards of operating a massive online Ponzi scheme that had gathered about $600 million. Similar to ASD, Zeek Rewards was a “program” that planted the seed it paid a return of 1.5 percent a day.

The SEC has described its Zeek probe as ongoing. The Secret Service said in August that it also was investigating Zeek.

Despite the fact Bowdoin was sued civilly, accused of racketeering and charged criminally with wire fraud, securities fraud and selling unregistered securities for the ASD scam, any number of ASD members turned to promoting Zeek, which planted the seed it paid out even more than ASD.

In August, the SEC accused Zeek of selling unregistered securities. Zeek operator Paul R. Burks, who is in his mid-60s, consented to a judgment in the civil case without admitting or denying the SEC allegations. Two prospective class-action lawsuits also were filed against Burks.

Despite the legal entanglements of both Burks and Bowdoin and Bowdoin’s prison sentence, some MLMers immediately began promoting similar “programs.”

Jan 15, 2013
Former Zeek Pitchman Who Also Pushed JSS/JBP Scam Reportedly Doubts He’ll Be Paid By ProfitClicking, A Follow-Up ‘Program’

Former Zeek Rewards and JSSTripler/JustBeenPaid pitchman “Alan Chapman” reportedly now claims he hasn’t been paid by “ProfitClicking” for “at least 3 months,” according to a post quoting “Chapman” on the MoneyMakerGroup Ponzi forum.

ProfitClicking is the absurd follow-up “program” to the bizarre JSS/JBP scam, a 730-percent-a-year “opportunity” purportedly operated by Frederick Mann. JSS/JBP may have had ties to the “sovereign citizens” movement. Like ProfitClicking, the JSS/JBP “program” made members affirm they were not with the “government.”

On Aug. 17, the SEC described Zeek as a $600 million Ponzi and pyramid scheme that was selling unregistered securities to sustain a massive fraud that duped members into believing it provided a legitimate return averaging 1.5 percent a day. Just a day earlier, JSS/JBP took a page from the Zeek playbook, asserting that it was not selling securities and members were not making an investment.

After the SEC’s Zeek action, JSS/JBP morphed into ProfitClicking, amid reports of the sudden retirement of Mann, a former pitchman for the AdSurfDaily Ponzi scheme. On Sept. 5, the PP Blog received a menacing communication threatening a lawsuit over its coverage of JSS/JBP/ProfitClicking. The lawsuit threat was made after the Blog reported that ProfitClicking was disclaiming any responsibility on the part of itself or its affiliates for offering the “program.”

Like Zeek, JSS/JBP/ProfitClicking was promoted on forums listed in U.S. federal court files as places from which Ponzi schemes are promoted. In the hours after the SEC action, the PP Blog began to receive spam for a “program” known as “Ultimate Power Profits.” A check of the MoneyMakerGroup Ponzi forum showed that Zeek peddler “mmgcjm” was the key pitchmen for Ultimate Power Profits.

The connectivity of the various scams shows how banks and financial vendors can come into possession of funds tainted by fraud schemes. Meanwhile, the court-appointed receiver in the Zeek case said last month that he had “obtained information indicating that large sums of Receivership Assets may have been transferred by net winners to other entities in order to hide or shelter those assets.”

“Chapman” was an apparent Diamond affiliate of Zeek. In June 2012 — apparently even as the SEC’s Zeek probe already was under way — a “Chapman” Blog known as “ZeekRewardsPays” asserted this (italics added):

ZeekRewards Daily Profit Last 7 Days!
June 11 2012 1.89 %
JUNE 10 2012 0.88 %
JUNE 09 2012 0.96 %
JUNE 08 2012 0.92 %
JUNE 07 2012 1.91 %
JUNE 06 2012 2.00 %
JUNE 05 2012 1.93 %

Court filings by the SEC last week suggest its Zeek probe began in April 2012 and perhaps earlier. What’s not known is when Zeek learned it was under investigation. It is not unusual for law enforcement to maintain secrecy when a “program” hits its radar screens. Court filings from 2008 show that the U.S. Secret Service had infiltrated AdSurfDaily with undercover agents who corresponded with ASD promoters prior to any public announcement of a probe.

At least one ASD member instructed an undercover agent not to call the “program” an investment, apparently based on the errant belief that wordplay designed to disguise ASD as an “advertising” program and not a program offering unregistered securities and unusually consistent returns at a preposterous rate of 1 percent a day somehow could insulate ASD from prosecution.

On Aug. 1, 2008, the Secret Service began the process of seizing more than $80 million from ASD-related bank accounts, alleging that the “opportunity” was a massive online Ponzi scheme. ASD, Zeek, JSS/JBP and Profit Clicking planted the seed they provided returns that made Bernard Madoff look like a piker. Viewed on an annualized basis, the “programs” effectively were asserting they could outperform Madoff by a factor on the order of between 30 and 70 to one.

The assertion by “Chapman” (as noted above) computed to an average daily return of 1.498 percent. On Aug. 17, the SEC said that Zeek operator Paul R. Burks “unilaterally and arbitrarily determines the daily dividend rate so that it averages approximately 1.5% per day, giving investors the false impression that the business is profitable.”

Burks consented to a judgment on the same day the SEC brought the Zeek Ponzi action. The U.S. Secret Service — also on Aug. 17 — announced it was investigating Zeek. In 2008, the Secret Service brought Ponzi allegations against ASD’s 1-percent-a-day “program.” ASD operator Andy Bowdoin later admitted he was running a Ponzi scheme. Bowdoin was sentenced to 78 months in federal prison. He is 78 years old.

Mann’s age is unknown. There have been reports he is in his eighties.

Jan 14, 2013
ASD Figures Todd Disner And Dwight Owen Schweitzer Toss Linguistic Spitballs At Federal Judge; Government Calls Them ‘Intemperate Attacks’

UPDATED 7:49 P.M. ET (JAN. 14, U.S.A.) Judge Rosemary Collyer has been on the federal bench in the District of Columbia for 10 years. She was nominated by President George W. Bush in 2002 and was confirmed by the U.S. Senate. Earlier in her career, then-attorney Collyer was appointed by President Reagan to lead the Federal Mine Safety and Health Review Commission.

Collyer is 67. She also has broad experience in the private sector, having been a partner at Crowell & Moring, a top-tier law firm with blue-chip clients and offices in the United States, the United Kingdom, Belgium, Egypt and Saudi Arabia.

As a federal judge, Collyer has presided over national-security cases, voting-rights cases, worker-rights cases, securities cases, cases involving international intrigue and U.S. foreign policy and a case involving an alleged would-be assassin of the President of the United States.

In 2009, when the PP Blog referenced Collyer in a story that mentioned her ruling in a case involving former U.S. Secretary of State Henry Kissinger, once National Security Adviser to President Richard M. Nixon, the Blog observed that “[n]o critic interested in fair or logical debate would dismiss her as an intellectual lightweight.”

AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer, though, have a different take on Collyer. To the former ASD Ponzi pitchmen who went on to become pitchmen for the alleged Zeek Rewards Ponzi scheme, Collyer is a “sophist” and the author of opinions in the ASD case that a “first year law student” would have found “repugnant.”

ASD was a $119 million Ponzi scheme. In August, the SEC described Zeek as a $600 million Ponzi- and pyramid fraud. Having once been involved in an effort to raise funds purportedly to defend ASD members from government overreach, Disner then became involved in efforts purportedly to raise funds to protect Zeek members from the government.

In November 2011, ASD figure and purported “sovereign citizen” Kenneth Wayne Leaming was arrested by an FBI terrorism Task Force on charges of filing false liens against at least five public officials involved in the ASD case, including Collyer. When Leaming was arrested, he allegedly was found in the company of two individuals who’d pulled off a multimillion-dollar bizop fraud in Arkansas.

During that same month, Disner and Schweitzer sued the United States. In court filings, the ASD duo alleged that the government had produced a “tissue of lies,” that its forfeiture case involving ASD assets was a “house of cards,” that the government had relied on “some of their Washington D.C. operatives to become members of ASD” in a bid to sink a legitimate business and that federal prosecutors had shopped the case to Collyer.

In May 2012, ASD operator Andy Bowdoin pleaded guilty to wire fraud and acknowledged ASD was a Ponzi scheme and that the Florida-based firm never had operated lawfully from its 2006 inception. Collyer tossed the claims of Disner and Schweitzer in August 2012. The ASD duo appealed, accusing Collyer of bias, sophistry and issuing rulings that would deeply offend even freshmen students of the law.

The government has responded to the Disner/Schwwitzer appeal.

“Appellants go so far as to argue that Judge Collyer ‘had so improperly authorized the taking of the Appellants[’] property and effects, that a first year law student would have found it repugnant’ and that ‘she abrogated her role as a jurist and became what can only be called a sophist,’” an appeals lawyer for the government argued. “Offering nothing more than intemperate attacks on the District Court Judge, Appellants failed to raise any specific facts suggesting bias on the part of the District Judge.”

Jan 10, 2013
LETTER TO READERS: Our Choice For The Most Important PP Blog Post Of 2012

Dear Readers,

The PP Blog’s choice for the “Most Important” story to appear on the Blog in 2012 is this one, dated July 28: “Site Critical Of Zeek Goes Missing After HubPages Receives Trademark ‘Infringement’ Complaint Attributed To Rex Venture Group LLC — But North Carolina-Based Rex Not Listed As Trademark Owner; Florida Firm That IS Listed As Owner Says It Has ‘No Knowledge’ Of Complaint.”

The story tells the bizarre tale of how purported Zeek “consultant” Robert Craddock, beginning on July 22, tried to gag K. Chang, a Zeek critic.

Our reasoning for selecting the Craddock tale appears below . . .

** __________________________________ **

UPDATED 1:30 P.M. ET (U.S.A.) This Blog is well aware that some MLMers would have you believe that nothing that appears here is important. The “case” against the Blog normally involves ad hominem attacks, along with bids to change the subject or cloud issues. Some of the campaigns against the PP Blog have been almost comical, falling along lines such as these: ASD can’t be a Ponzi scheme because it rained on Tuesday. Your [sic] an idiot and looser [sic] !!!!!

Other campaigns have been much more menacing.

One of the least-appreciated aspects of the Zeek Rewards story is that Zeek launched after Bernard Madoff made the word “Ponzi” a part of the national (and international) consciousness. Setting aside Zeek’s epic legal problems, Zeek and its “defenders” have a PR problem from which they’ll never recover. In short, it is fatal. The reason that it’s fatal is that it creates a dynamic that is virtually unique to the MLM HYIP sphere: While the rest of the world rails against Ponzi schemes and Ponzi schemers, the MLM HYIP sphere defends them.

But it gets stranger than that. Certain inhabitants of the HYIP sphere in effect are lobbying for the legalization of Ponzi schemes to make their lives more convenient. To this group, the answer to Ponzi schemes is even more Ponzi schemes. Their message is remarkably similar to the message of the gun lobby, which appears to be arguing that the answer to gun violence is even more guns — in strategic locations, of course, perhaps in educational institutions at the grade-school level through college. (And maybe at movie theaters and at the scene of rural house fires, in case first responders such as firefighters and EMTs encounter an ambush.)

You’ve heard by now that the rural town of Webster, N.Y., turned into Israel last week, we’re sure.

In fairness to the gun lobby, it must be pointed out that HYIP “defenders” who are lobbying for more Ponzi schemes even as the gun lobby lobbies for more guns have less legal standing than the gun lobby. Guns already are legal. Ponzi schemes are not.

But, getting back to Zeek’s PR problem . . .

Madoff was exposed in 2008 as a Ponzi schemer, a financial criminal of unprecedented hubris. Not only did Zeek debut after Madoff, it came after Scott Rothstein was exposed (in 2009) as a racketeer/Ponzi schemer — and after AdSurfDaily, a purported MLM “advertising” company, was exposed (in 2008 and 2009) as the largest online Ponzi scheme ever and was sued by its own members amid allegations of racketeering.

For some Zeek promoters, this well-known fact set makes them vulnerable to charges they are nothing less than members of an organized mob of habitual criminals who thrive by choosing to be willfully blind.

But, incredibly, it gets even stranger . . .

Zeek had members in common with AdSurfDaily and, like AdSurfDaily, told members that a purported “advertising” function was central to its business model. Meanwhile, Zeek became popular in North Carolina, after the infamous Black Diamond Ponzi caper was exposed in that very state. (Among other things, the Back Diamond fraud led to criminal charges being filed against a bank.)

Along those lines, Zeek (in May) began to show signs that it was experiencing banking problems after it had become popular in a region known to have served up another colossal mess, this one in nearby South Carolina. (The South Carolina mess was known as the “3 Hebrew Boys” scheme. It resulted in the longest Ponzi scheme sentences in the history of the South Carolina federal courts and, like AdSurfDaily and Zeek, served up a heaping helping of the bizarre, including claims by “sovereign citizens” that prosecutors had no authority over them.)

Moreover, the Zeek scheme for which some “defenders” continue to cheer featured recruitment commissions on two levels (like AdSurfDaily) and an “RPP” payout (like ASD’s 1-percent-a-day “rebates”). Finally, the Zeek scheme came to the fore after the U.S. Secret Service described ASD as a “criminal enterprise” and after the Attorney General of the United States made a special public appearance in Florida — fertile recruitment grounds for schemes such as Zeek and the stomping grounds of Madoff and Rothstein — to announce that the Justice Department was serious about putting people in jail for ravaging the U.S. economy with their Ponzi schemes.

“Palm Beach is, in many respects, ground zero for the $65 billion Ponzi scheme perpetrated by Bernard Madoff — the largest investor fraud case in our nation’s history,” Eric Holder said on Jan. 8, 2010, in southern Florida. “Before the house of cards Madoff built collapsed in 2008, before he was sentenced to 150 years in prison last June, before he became a notorious criminal on the cover of newspapers around the world, he was one of your neighbors.

“His former home sits just north of us,” Holder continued. “An 8,700-square-foot mansion that’s worth . . . well, we’ll know what its worth once the U.S. Marshals Service auctions it off and the proceeds are distributed to Madoff’s victims.”

Holder’s words are best viewed as a warning against willful blindness: Neither victim nor perpetrator be. There is unqualified pain and misery for both.

Despite Holder’s appearance in Florida — despite his reference to Madoff’s “house of cards” — AdSurfDaily promoters Todd Disner and Dwight Owen Schweitzer later sued the United States, claiming that its Ponzi case against ASD was a “house of cards.” Naturally they made this claim even as they were promoting Zeek.

And from what region were they promoting Zeek? Why, Southern Florida, of course, the same region Holder visited in 2010 to throw down the gauntlet against Ponzi schemers and their enablers.

Amid the historical circumstances cited above, Zeek Rewards began to encounter some heat from the media and from its own members. Some of the members did not understand why things at Zeek appeared to be so circuitous and why they were being asked to use payment processors such as AlertPay and SolidTrustPay that had been associated with fraud scheme after fraud scheme operating online, including ASD.

What to do if you’re Zeek?

Well, according to Florida resident Robert Craddock, a self-described Zeek consultant, you hire, well, Robert Craddock — and you use Robert Craddock to go after Zeek critics such as K. Chang.

The Most Important Story Of 2012

In the PP Blog’s view, the most important story to appear on the Blog in 2012 is this one, titled, “Site Critical Of Zeek Goes Missing After HubPages Receives Trademark ‘Infringement’ Complaint Attributed To Rex Venture Group LLC — But North Carolina-Based Rex Not Listed As Trademark Owner; Florida Firm That IS Listed As Owner Says It Has ‘No Knowledge’ Of Complaint.”

The story details efforts in July by Craddock to have K. Chang’s Zeek “Hub” at HubPages removed from the Internet just weeks before the SEC accused Zeek of being a $600 million Ponzi- and pyramid fraud. By early estimates, the alleged Zeek fraud was about five times larger than ASD in pure dollar volume ($600 million compared to $120 million) and perhaps 20 times larger in terms of the membership base (2 million compared to 100,000).

Incredibly, Craddock went after K. Chang after Deputy Attorney James Cole, speaking in Mexico, said that international fraud schemes have been known to “bring frivolous libel cases against individuals who expose their criminal activities.” And Cole also pointed out that fraudsters have a means of “exploit[ing] legitimate actors” and may rely on shell companies and offshore bank accounts to launder criminal proceeds.

If ever a company exploited legitimate actors, it was Zeek. Kenneth D. Bell, the court-appointed receiver, says there were approximately 840,000 Zeek losers who funded the ill-gotten gains of 77,000 winners. And Bell also says he has “obtained information indicating that large sums of Receivership Assets may have been transferred by net winners to other entities in order to hide or shelter those assets.”

There can be no doubt that some of those winners are longtime residents of the woeful valley of willful blindness. Not only do they “play” HYIP Ponzis for profit, they now publicly announce their intent to keep their winnings. Zeek has exposed the epicenter of willful blindness, the criminal underworld of the Internet. It is easy enough to view Craddock’s efforts as a means of institutionalizing willful blindness, first by seeking to chill speech and, second, by scrubbing the web of information that encourages readers to be discriminating so they won’t be duped by a Ponzi fraudster.

Bizarrely, it appears as though someone inside of Zeek believed it prudent to hire Craddock to go after K. Chang. If that weren’t enough, only days later Zeek used its Blog to plant the seed that unnamed “North Carolina Credit Unions” were committing slander against Zeek.

After the SEC brought the Zeek Ponzi complaint in August, Craddock quickly went in to fundraising mode. As incredible as it sounds, ASD’s Todd Disner — also of Zeek — was on the line with him.

What Craddock did was deplorable. It was as though he slept through the past four years of Ponzi history, all the cases that showcase the markers of fraud schemes and all the government warnings to be cautious. (Nongovernment/quasigovernment entities such as FINRA also publish such warnings, like this one on HYIP fraud schemes outlined by the PP Blog.)

The FINRA warning was published in 2010, prior to Zeek but after the Legisi, Pathway To Prosperity and ASD schemes were exposed. Legisi operator Gregory McKnight potentially faces 15 years in federal prison. He was charged both civilly (SEC) and criminally (U.S. Secret Service) — and Legisi pitchmen Matthew John Gagnon also was charged civilly and criminally by the same agencies. The SEC called Gagnon a “threat to the investing public.”

Any number of Zeek promoters pose a similar threat. They are at least equally willfully blind.

It is clear that some Zeek promoters also were promoting JSSTripler/JustBeenPaid, the debacle-in-waiting purportedly organized by Frederick Mann, a former ASD promoter. JSS/JBP has morphed into “ProfitClicking” amid reports of the “retirement” of Mann. Now, ProfitClicking “defenders” are threatening lawsuits against critics.

Naturally the stories advanced by ProfitClicking “defenders” are being improved by “defenders” of other obvious fraud schemes such as BannersBroker. A BannersBroker “defender” is over at RealScam.com — an antiscam site — suggesting that RealScam is a terrorist organization.

My God.

These claims are being made just days after Zeek figure Robert Craddock suggested he had contacts in law enforcement who were going to charge Blogger Troy Dooly with cyber harassment.

It wouldn’t sell as fiction.

Craddock’s bid to gag K. Chang easily was the most important story on the PP Blog in 2012. It’s the one that signaled that things are destined only to get crazier in MLM La-La Land and that the threat to U.S. national security only will grow.

Dec 27, 2012
Florida Man Who Hosts Zeek Calls Featuring Robert Craddock Was Winner In Botfly LLC Ponzi Scheme

UPDATED 3:57 P.M. ET (U.S.A.) Gregory Baker, a Florida man who hosts calls featuring Robert Craddock in the aftermath of the SEC’s Ponzi-scheme case against Zeek Rewards, is listed as a winner in the Botfly LLC Ponzi scheme case, one of the Sunshine State’s ugliest fraud schemes.

Prosecutors said that David Lewalski, Botfly’s now-imprisoned operator, tried to dupe investors into not cooperating with investigators and to coach investors on their testimony. The SEC last week accused Craddock of encouraging Zeek affiliates “not to cooperate” with Kenneth D. Bell, the court appointed receiver.

No charges have been brought against Craddock.

Court records show that Baker, who has used an address in the Tampa suburb of Valrico, was sued for his Botfly winnings by Michael E. Moecker, the court-appointed receiver in the Botfly case. Other records show that Baker presided over a now-defunct Florida entity known as Integrity Currency Traders LLC.

Integrity was formed on March 15, 2010. Less than three weeks later — on April 1, 2010 — then-Florida Attorney General Bill McCollum alleged that Botfly was a massive Ponzi scheme that affected at least 550 investors, gathered tens of millions of dollars and got its name from “an insect whose larvae burrow under the skin of mammals and eat their flesh until they mature into an adult fly.”

Bell asserted last week that he had “obtained information indicating that large sums of [Zeek] Receivership Assets may have been transferred by net winners to other entities in order to hide or shelter those assets.” The receiver did not identify winners who may be hiding assets.

Moecker sued Baker in December 2011, alleging that Baker had received $8,580 in ill-gotten gains from Botfly, a purported Forex company prosecutors said promised a return on “promissory notes” of 10 percent a month. Under the terms of a settlement with the receiver, Baker agreed on Jan. 31, 2012 — only weeks after being sued — to pay the Botfly receivership estate $7,722, according to court filings. The sum represented a discount of $858 from Baker’s alleged winnings.

Zeek planted the seed that it provided a return of 1.5 percent a day.

Whether Baker was a member of Zeek when he paid back his Botfly winnings is unclear. In August 2012, the SEC described Zeek as a $600 million Ponzi- and pyramid scheme that potentially had defrauded more than 1 million people. Baker now is listed on a website styled gofunplaces.info as a member of the “Top Team” and a leader of Go Fun Places, a nascent MLM program.

Lewalski operated Botfly in part from the Florida home of his 82-year-old mother, according to prosecutors.

After McCollum sued Lewalski/Botfly, Lewalski chartered a private Gulfstream IV jet at a cost of $172,744 to fly from the United States to Belgium, prosecutors said. He eventually became the target of a federal criminal probe and, in November 2011, was sentenced to 20 years in federal prison. Moecker, the receiver, sued Baker a month later.

Lewalski became infamous for wretched conduct before, during and after the Botfly probe. He directed conspiracy theories at investigators, complaining about “recent ‘Orwellian’ totalitarian tactics” allegedly employed by U.S. investigators in Ponzi scheme cases. He described a female attorney working for the receiver as a “c[$%!]” and a “Nazi,” and further described a female investigator for the Florida Department of Law Enforcement (FDLE) as “nuts” and a “bitch” — all while seeking to obstruct the Botfly probe, according to prosecutors.

After the SEC brought the Zeek Ponzi prosecution, Craddock dropped the name of McCollum in a conference call, describing the former Attorney General now in private practice at the SNR Denton law firm as a good friend. Craddock’s efforts to secure counsel through SNR Denton for a purportedly “protected” group of Zeek affiliates upset by the actions of the SEC and the appointment of a receiver in the Zeek case ultimately failed.

On the line with Craddock in one of his Zeek-related conference calls was Todd Disner, a Zeek pitchman and a figure in the AdSurfDaily Ponzi scheme story. McCollum sued ASD in 2008. His office later provided the names of ASD victims to the Feds as part of remissions program by which ASD members received compensation as crime victims from proceeds seized by the U.S. Secret Service in 2008. In November 2011, Disner sued Rust Consulting Inc., the remissions administrator. A federal judge eventually tossed Disner’s claim against Rust. That claim was brought in the same case in which Disner sued the United States, alleging that ASD was a legitimate enterprise and that the government had violated his Constitutional rights by seizing ASD’s database and business records.

A judge tossed Disner’s claims against the government, too. He is now appealing. Disner’s co-plaintiff in the case was fellow ASD and Zeek pitchman Dwight Owen Schweitzer, a former attorney whose license was suspended in Connecticut.

On the line with Craddock in another Zeek conference call was T. LeMont Silver. Like ASD’s Andy Bowdoin, Silver was a pitchman for a scheme known as OneX. In April, about four months before the SEC’s Zeek action, federal prosecutors described OneX as a “fraudulent scheme” and pyramid that was recycling money in ASD-like fashion. ASD was a Ponzi scheme that gathered at least $119 million, according to prosecutors.

Zeek appears not to have been Silver’s first encounter with an alleged Ponzi scheme. During the call with Craddock, Silver identified himself as a victim of a separate Ponzi scheme he did not name. He complained bitterly during the call about the purported lack of action by an unnamed receiver in the second scheme.

Craddock has been leading a chorus of boos against the SEC and the receiver in the Zeek case, planting seeds of doubt that Zeek was a Ponzi scheme. Court filings suggest that Zeek winners potentially have tens of millions of dollars in clawback exposure in the Zeek case.

When Baker was sued by the receiver in the Botfly case, the lawsuit effectively was filed on the same theory the Zeek receiver is using: that proceeds from a Ponzi scheme are ill-gotten gains. Whether Baker has exposure as a Zeek winner is unclear.

What is clear is that Craddock says reporters are spreading misinformation about Zeek. In a call last week, Craddock said he intended to file a police report against Blogger Troy Dooly after hearing from Zeek members who complained about how Dooly is covering the Zeek fallout on his MLMHelpDesk Blog.

Dooly once was a fan of Zeek and has acknowledged he was reimbursed for certain expenses by Zeek while covering Zeek. His reports on the scheme apparently have become too negative for Craddock, who once spoke positively of Dooly.

“I am always looking for a new Epic Adventure, so this should be fun to experience,” Dooly said on his Blog on Friday, in response to Craddock’s claims that he’ll use police contacts against Dooly.

As was the case when he dropped McCollum’s name while collecting funds to challenge the actions of the SEC and the receiver in the Zeek case, Craddock last week dropped the name of the Florida Department of Law Enforcement in his remarks about the police action he has planned against Dooly.

Dooly, Craddock ventured, needed to be charged with cyber harassment and gotten “rid of” by law enforcement.

Whether FDLE would take kindly to Craddock’s dropping of its name was not immediately clear.

In the 2010 Botfly case, McCollum’s office said this (italics added):

The order to freeze assets and the injunction were obtained yesterday after an investigation by a dedicated team in the Attorney General’s Office that works under the Florida Securities and Investor Protection Act, a new law championed last year by the Attorney General and bill sponsors Representative Tom Grady and Senator Garrett Richter. The law provides the Attorney General’s Office with greater authority to pursue investment and securities fraud.

Dec 24, 2012
BULLETIN: Zeek Receiver Says ‘Large Sums . . . May Have Been Transferred By Net Winners To Other Entities In Order To Hide Or Shelter Those Assets’

BULLETIN: (UPDATED 2:34 P.M. ET U.S.A.) The court-appointed receiver in the Zeek Rewards Ponzi scheme case has advised a federal judge that he “has obtained information indicating that large sums of Receivership Assets may have been transferred by net winners to other entities in order to hide or shelter those assets.”

The dramatic assertion by receiver Kenneth D. Bell that Zeek winners may have hidden cash appeared in a motion to Senior U.S. District Judge Graham C. Mullen to compel certain alleged Zeek “winners” to produce documents in advance of anticipated clawback actions.

Bell’s move may send shudders across the HYIP sphere because it signals an effort to unmask bids by willfully blind hucksters and professional Ponzi players — known derisively as “pimps” — to benefit from serial scamming on a national and international scale. It is known, for instance, that some Zeek participants also pitched AdSurfDaily, which the U.S. Secret Service described in 2008 — at least two years before the launch of Zeek — as an international Ponzi scheme that had gathered tens of millions of dollars.

ASD operator Andy Bowdoin pleaded guilty to wire fraud in May. In August, he was sentenced to 78 months in federal prison.

HYIP schemes thrive in part because serial scammers race from scheme to scheme to scheme while turning blind eyes to obvious markers of fraud, including purported returns that dwarf the marketplace and are unusually consistent. Zeek planted the seed that it provided a daily return of between 1 percent and 2 percent. In August, the SEC said Zeek’s payout “consistently has averaged approximately 1.5% per day.”

Zeek operator Paul R. Burks, the SEC charged, “unilaterally and arbitrarily” determined the daily dividend rate to give “investors the false impression that the business is profitable.”

In 2009, the U.S. Secret Service effectively accused Bowdoin of doing the same thing. ASD purported to pay 1 percent a day. In August 2012, the Secret Service said it also was investigating Zeek. Court filings in the ASD case show that some members of ASD established entities through which to receive proceeds from ASD. One was described as a “ministry of giving,” for instance. Another was described as a nonprofit religious entity.

The Secret Service described ASD as a “criminal enterprise” that directed tainted proceeds potentially to thousands and thousands of participants while scamming the very people it purported to be helping earn money through its 1-percent-a-day revenue-sharing “program.”

Zeek also described itself as a revenue-sharing program and, like ASD, preemptively denied that anything untoward was occurring. Burks did not contest the SEC’s case against his firm, neither admitting nor denying wrongdoing. ASD’s Bowdoin eventually acknowledged that he was at the helm of a massive Ponzi scheme and that ASD had never operated lawfully from its inception in 2006 through it collapse in 2008.

Bell also revealed in the filing that he had filed paperwork in “all” 94 U.S. federal court districts to inform judges and court officials that he was presiding over the receivership ordered by Mullen in August after the SEC described Zeek as a $600 million Ponzi- and pyramid scheme operated through Rex Venture Group LLC (RVG) and Burks. The move was designed to consolidate jurisdiction over clawback actions in a single place: Mullen’s courtroom in the Western District of North Carolina, the home base of Zeek.

Among other things, Bell is seeking “All documents constituting or relating to any communication involving or related to RVG.”

“The Receiver has asked for these documents to learn more about how the recipient was involved in Zeek, portrayed the scheme to others, solicited others, and otherwise conducted activities related to Zeek,” Bell said in court filings.

Meanwhile, Bell is seeking “All documents constituting or related to any communication to any affiliate, vendor, customer or client of RVG related to RVG.” At the same time, he is seeking “Documents sufficient to show all user names, passwords, email addresses and accounts used . . . in connection with RVG.”

That information is needed because many “individuals used multiple user names, and this information will clarify which user names a given net winner used,” Bell advised Mullen. “In addition, the account information will help to allow the Receiver to verify the financial figures calculated from RVG’s records.”

Bell’s motion to compel specifically references Zeek affiliates Robert Craddock, David Sorrells, David Kettner and Mary Kettner as the recipients of subpoenas from the receivership. In October, Bell mailed a first wave of subpoenas to about 1,200 Zeek affiliates. He effectively is seeking the same information from them that he is seeking from Craddock, the Kettners and Sorrells.

Craddock, the Kettners and Sorrells “have failed to produce any of the documents requested by the Receiver despite multiple requests,” Bell advised Mullen. “Therefore, the Receiver has filed a motion to compel production of a portion of the documents originally requested by the Receiver.”

The Kettner and Sorrells potentially have nearly $2 million in combined clawback exposure, according to court filings. Craddock’s exposure is unclear. He has referred to himself as a Zeek “consultant.”

One of the authorities Bell pointed to in advance of Zeek clawback actions and in his motion to compel the production of documents is a case involving Michael Quilling, an attorney for Craddock, the Kettners and Sorrells. Quilling himself has presided over SEC receiverships.

Bell pointed out to Mullen that Quilling once sued the estate of a a deceased individual who’d received proceeds from the Frederick J. Gilliland Ponzi scheme in 2002. That lawsuit was filed on the same legal theory Bell is pursuing in the Zeek case: that recipients of fraudulent proceeds from a Ponzi scheme are not entitled to keep them.

See post on ASDUpdates.

Dec 20, 2012
BULLETIN: Zeek Receiver Opposes Appointment Of ‘Examiner’; Zeek Cheerleaders, ZTeamBiz Missives Get A Mention; Let Them ‘Employ Counsel At Their Own Expense,’ Bell Urges Judge

“The ZeekRewards scheme has claimed hundreds of thousands of victims who lost hundreds of millions of dollars at the hands of the scheme’s winners who solicited their participation. Now, apparently not appreciating the irony, the lawyer for hundreds of the largest net winners asks the Court to pay him to be an ‘examiner’ or ‘representative for the affiliates,’ yet again at the expense of the scheme’s victims. The requested appointment is unnecessary and ill-advised because it would duplicate and complicate this Court’s, the Receiver’s, and the SEC’s efforts to compensate the victims, not to mention directly reduce the Receivership Assets available to pay them. Furthermore, the individual whom the net winners recommend for appointment (or more correctly who recommends his own appointment) ignores the inherent conflict of interest in seeking to somehow represent both the scheme’s ‘winners’ and ‘losers,’ two groups with irreconcilably adverse interests.” — Zeek receiver Kenneth D. Bell, Dec. 17, 2012

Section from an email received by the court-appointed receiver in the Zeek Rewards Ponzi scheme case. The note asks the receiver to oppose efforts by Zeek winners to intervene in the case. Source: federal court files.

Shortly after the SEC described Zeek Rewards on Aug. 17 as a $600 million Ponzi- and pyramid scheme, Zeek figure Robert Craddock solicited donations purportedly to hire an attorney and form a “protected” group of affiliates. Whether Zeek losers gave to the effort conducted at ZTeamBiz through Fun Club USA, Craddock’s Florida-based entity, remains unclear.

On Aug. 29, PP Blog guest columnist Gregg Evans questioned how Zeek winners and losers ever could be on the same side.

Today the court-appointed receiver effectively was asking the same question. His conclusion was that they could not — and he asked Senior U.S. District Judge Graham C. Mullen to reject a contention by certain Zeek “winners” that they could.

“The net winners have already been put on notice that they will be asked to return their winnings to the Receiver for reimbursement to the net losers,” Bell said in court filings. “On the other hand, the net losers hope that they can recoup some of their losses from the gains of the scheme’s net winners . . . Thus, the winners and losers are plainly opposed in their respective interests regarding the winners’ efforts to keep their winnings.”

Presumptive Zeek clawback targets Dave Kettner, Mary Kettner and David Sorrells asked Mullen last month to appoint Dallas attorney Michael Quilling as “examiner” over all Zeek affiliates. That should not be permitted to happen, Bell contended, because Quilling “has appeared in this case already as an attorney for Fun Club USA and represents the interests of those net winners.”

In a bid to bolster his claim, Bell cited Craddock ties to Dave Kettner through ZTeamBiz and quoted from a letter attributed to Kettner.

“In a similar vein, Mr. Kettner sent a letter seeking donations from affiliates that stated, “The SEC has tried to make us all believe that Zeek Rewards was an ‘investment’ and a Ponzi scheme. All the pages that were submitted by the SEC indictment [sic] has [sic] all been one sided and what we believe to be a misrepresentation of the truth and facts of what Zeek Rewards was as a viable and legal business,” Bell advised the judge in a footnote that included the URL to ZTeamBiz.

Beyond that, Bell argued, the Craddock entity, the Kettners and Sorrells had no standing in the case brought by the SEC.

And Bell said he has heard from Zeek members who want him to oppose the appointment of Quilling as examiner.

Here, according to Bell, is a passage from one such Zeek member who contacted Bell after learning about the “examiner motion”:

As one of the many losers in Zeek Rewards I wish to encourage you to do whatever is possible to block the motion filed on behalf of Fun Club USA (Robert Craddock) David & Mary Kettner and David Sorrells, asking that their personal attorney Michael J Quilling be appointed as the Examiner to oversee and represent the interest of ALL former Zeek Rewards affiliates.

To many of us this is just another way for another attorney firm to slow up your process of recovery and to diminish the amount of funds to be returned to those of us who are in hopes of being able to recover some of our losses.

Personally I feel that their agenda is also to help block your efforts to recover funds from the 1200 who received subpoenas.

The Kettners and Sorrells potentially have exposure of nearly $2 million in receivership clawback litigation, Bell said.

At least two apparent Zeek winners represented by attorney Ira Lee Sorkin also oppose the appointment of Quilling as examiner, according to filings last week.

Todd Disner, a Zeek affiliate and figure in the AdSurfDaily Ponzi scheme story, once was on a conference call with Craddock.

In recent remarks, Craddock said Disner was in Hong Kong with a “lost” passport.

Reports now have surfaced that Craddock is pitching a “program” known as Offer Hubb that uses a Wyoming mail drop as its address. Disner’s name was listed on the Offer Hubb pitch, according to BehindMLM.com.

Dec 17, 2012
Payment Processor For Cybercrime Ring Sentenced To 48 Months In Federal Prison; ‘Operation Trident Tribunal’ Is Ongoing

Mikael Patrick Sallnert has been sentenced to 48 months in federal prison for his role in processing payments for a cybercrime ring, the U.S. Justice Department announced.

Sallnert, 37, is a citizen of Sweden. As part of “Operation Trident Tribunal,” Sallnert was arrested in Denmark on Jan. 19, 2012, and extradited to the United States in March 2012. He pleaded guilty on Aug. 17, 2012, to one count of conspiracy to commit wire fraud and one count of accessing a protected computer in furtherance of fraud, the Justice Department said.

“Payment processors like this defendant are the backbone of the cybercrime underworld,” said U.S. Attorney Jenny A. Durkan of the Western District of Washington. “As an established businessman, this defendant put a stamp of legitimacy on cyber criminals. He was involved in defrauding thousands of victims, and his actions contributed to insecurities in e-commerce that stifle the development of legitimate enterprises and increase the costs of e-commerce for everyone.”

If Durkan’s name rings familiar to PP Blog readers, it’s because her office is involved in an investigation into the activities of a group of “sovereign citizens” operating in the Pacific Northwest. Kenneth Wayne Leaming, a figure in the AdSurfDaily Ponzi scheme story, is being prosecuted by Durkan’s office amid allegations he filed false liens against at least five public officials in the ASD Ponzi scheme case.

Sallnert, prosecutors said, provided payment-processing services for “scareware” vendors.

“Mikael Patrick Sallnert played an instrumental role in carrying out a massive cybercrime ring that victimized approximately 960,000 innocent victims,” said Assistant Attorney General Lanny A. Breuer. “By facilitating payment processing, Sallnert allowed the cybercrime ring to collect millions of dollars from victims who were duped into believing their computers were compromised and could be fixed by the bogus software created by Sallnert’s co-conspirators. Cybercrime poses a real threat to American consumers and businesses, and the Justice Department is committed to pursuing cybercriminals across the globe.”

Operation Trident Tribunal is an “ongoing, coordinated enforcement action targeting international cybercrime,” prosecutors said.

“This cyber crime ring spanned multiple countries—increasing the threat it posed and complicating the necessary law enforcement response,” said Laura M. Laughlin, special agent in charge of the FBI’s Seattle Division. “Thanks to the commitment of many foreign partners and FBI entities across the nation, we were able to dismantle that threat and ensure Mr. Sallnert faced justice.”

Scams often rely on international payments processors to fleece their victims.

Dec 17, 2012
Potential Zeek Clawback Target Pitched Collapsed Regenesis 2X2 Cycler: ‘Giddy Up. Get Involved. [It’ll] Be The Best Decision You Ever Made’

UPDATED 7:55 A.M. ET (DEC. 23, U.S.A.) In May 2009, before the launch of the alleged Zeek Rewards Ponzi scheme, a Zeek promoter who has hired famed attorney Ira Lee Sorkin appeared in a check-waving video for an “opportunity” known as Regenesis 2X2.

Check-waving is used as a form of “proof” that an “opportunity” that “pays” is not a scam.

“Giddy up,” intoned Trudy Gilmond of Vermont. “Get involved. [It’ll] be the best decision you ever made.”

Gilmond, according to the video she narrated while waving two checks from Regenesis 2X2 totaling $1,200, sent by Priority Mail and drawn on Bank of America, was “fired up.”

She’d been in Regenesis 2X2 only since May 1, and already had received a nice payout, Gilmond explained.

“Knew this company would work,” she said, before alluding to a Biblical tale of an apostle who insisted on proof of the resurrection of Jesus.

“A lot of people are nonbelievers, doubting Thomases, didn’t believe it,” Gilmond said. She then presented checks as a form of proof that Regenesis 2X2 paid.

About two months later — in July 2009 — the U.S. Secret Service applied for search warrants in federal court in Washington state, the purported home of Regenesis 2X2. From a PP Blog story on Aug. 3, 2009 (italics added):

Agents, according to court filings, observed complaint letters directed at the firm being discarded into a Dumpster that was kept under constant surveillance. Also found in the Dumpster were copies of checks sent in by customers, other documents that included customers’ names and information to identify them personally, complaint faxes sent by customers and a letter from a law firm complaining about false, misleading and deceptive advertising.

In one case in which agents were observing one of the adult principals in the case, they observed a youth described as a teenager exiting a vehicle and “struggling with a large arm full of opened business and UPS Priority Mail envelopes,” the Secret Service said in court filings.

The juvenile entered a building and “then immediately came back outside and discarded the materials into an alley [D]umpster,” agents said.

Agents identified the adult under surveillance as a person “arrested by the Internal Revenue Service out of Las Vegas, Nevada[,] for felony violations related to Illegal Money Laundering from Securities Fraud and Wire Fraud” in a previous case.

How the Regenesis 2X2 probe proceeded is unclear.

What is clear is that Zeek eventually came to the fore. In court filings, Sorkin has noted that Gilmond has potential clawback exposure of more than $1.364 million from the court-appointed receiver in the Zeek Rewards Ponzi scheme case.

Gilmond once was listed on a Zeek website as both an “Employee” and “Official Rep.” So, too, was Zeek pitchman OH Brown of USHBB Inc., which produced ads for both Zeek and the collapsed Narc That Car pyramid scheme. For a while, at least, Zeek and Narc That Car appear to have used the same North Carolina-based bank: NewBridge.

Checks displaying the name of NewBridge showed up in independent affiliate promotions on YouTube in 2010. After one Narc affiliate quit the program, he moved to another one. The check-waving for the new “program” began at the one-second mark. Literally.

BehindMLM reported yesterday that Brown may have a tie to a burgeoning “opportunity” known as Offer Hubb. AdSurfDaily and Zeek promoters Todd Disner and Jerry Napier also appear to be in the communication chain of Offer Hubb. The U.S. Secret Service has described ASD as a “criminal enterprise.” The U.S. Department of Justice has described ASD as “insidious.”

A source told the PP Blog last week that Zeek figure Robert Craddock now was pitching Offer Hubb. Craddock is a purported Zeek “consultant” raising money to contest elements of the SEC’s Ponzi-scheme complaint and the court-appointed receivership. In July, Craddock sought to have the website of Zeek critic K. Chang removed from the Internet. Craddock was successful briefly, but the “K. Chang” Hub at HubPages returned.

By Aug. 4 — just 13 days prior to the filing of a emergency action by the SEC alleging that Zeek was a $600 million Ponzi- and pyramid scheme — Zeek used its Blog to blast unspecified “North Carolina Credit Unions” for raising questions about the “program.”

For years, questions have been raised about whether fraud schemes within the MLM sphere were recycling money between and among schemes and putting banks and other financial-service companies in possession of tainted funds. Purported “Wiring Instructions” of Offer Hubb imply that the Wyoming-based entity is soliciting sums of up to $10,099 from prospects and is using City National Bank.

From a section of the BehindMLM report that describes an address used by Offer Hubb (italics added):

As mentioned in the introduction of this review, “1712 Pioneer Avenue” is the headquarters of “Corporations Today”. The address is apparently so well-known in tax haven circles that Reuters used the 1712 Pioneer Avenue building itself for a 2011 article on corporate secrecy in the United States.

Dec 17, 2012
CURIOUS: 3 Of 5 ‘Most Popular’ Stories On PP Blog Last Week Were ‘Old’ Articles On The AdSurfDaily And AdView Global Scams

UPDATED 8:55 A.M. ET (U.S.A., DEC. 11) Are Zeekers doing research in advance of clawback actions in the Ponzi scheme case or otherwise trying to get a sense of history? Are they (or other readers) trying to gain a better understanding of ties that may exist among Zeek, AdSurfDaily and AdViewGlobal?

Three of the PP Blog’s five “Most Popular” stories last week were “old” articles about ASD and AVG, according to a tracking service used by the Blog. AVG had not dominated reader interest on the PP Blog for nearly three years.

Here are links to (and briefs about) those stories:

From July 16, 2009: (No. 2 in ‘Most Popular’ rankings last week.) BREAKING NEWS: Federal Judge Says Curtis Richmond, Six Other Parties Who Used Pro Se Litigation Blueprint, Cannot Intervene In AdSurfDaily Forfeiture Case

The July 16, 2009, story reported that seven would-be, pro se intervenors in the ASD Ponzi case were denied standing by a federal judge. In her ruling, the judge pointed out that the first filing occurred in February 2009. It is “representative and seems to be a ‘form’ complaint inasmuch as the others are duplicates,” the judge said.

A key part of the ruling (italics added): “Fraud victims who voluntarily transfer their property to their wrongdoers do not retain a legal interest in their property; instead, such victims acquire a debt against their wrongdoers.”

Waves of other pro se filiers later were denied standing in the case. (On at least two occasions, the judge denied the would-be intervenors en masse.)

It perhaps is worth pointing out that standing also could become an issue in the Zeek case. Given ASD’s history, it also seems possible that “defenders” of the Zeek scheme will ponder the use of shared litigation templates. (The ASD templates, which advanced conspiracy theories and accused public officials of crimes, didn’t “work.” To date, one Zeeker has accused the court-appointed Zeek receiver of a crime.)

From Dec. 7, 2009: (No. 4 in “Most Popular” rankings last week.) AdViewGlobal Recording Suggests Member Cashed Out $10,000 Only Days After Formal Launch And That Insiders Were Awarded Bonuses; Less Than Two Weeks Later, Surf Switched To ‘Private Association’ Structure

The Dec. 7, 2009, story reported that AVG, a purported offshore entity, had conducted conference calls earlier in the year and lured prospects with “bonuses.” It also reported that some AdSurfDaily figures were among the first to receive the “bonuses.”

It perhaps is worth pointing out that an effort by some Zeek insiders now appears to be under way to lure their downlines into nascent “programs,” at least one of which is being positioned as a way to maintain a Zeek downline in a new “program” and receive a bonus. The name of the new “program” that purportedly will provide bonuses to Zeek members and its base of operations are unclear.

Zeek and ASD figure Todd Disner, however, recently was reported to be in Hong Kong with a “lost” passport.

“Todd Disner,” said Zeek figure Robert Craddock on a call last week. “Bless his heart. I don’t know if he’s found his passport yet, but he’s . . . in Hong Kong right now assisting us with this new program. And he’s lost his passport. So, I don’t know if he’s made it back to the states yet or not. And, so, we’re all working very, very hard to pull this together for you.”

Some Zeekers have ported themselves to schemes such as “BannersBroker” and “GoFunPlaces.” It is possible that any number of Zeek members took soiled proceeds from previous scams to their new “opportunities.” What’s not known at this time is what will happen if Zeek “winners” who are the prospective targets of clawback litigation will do if they moved illicit Zeek proceeds into another scheme or dissipated the money in other ways.

From the Dec. 7, 2009, story (italics added):

The conference call, hosted by Terralynn Hoy, a Moderator at both the Pro-AdSurfDaily Surf’s Up forum and a ning.com forum set up to promote AVG, did not disclose how the member amassed a large sum in only days and qualified for a cashout. But another participant in the call announced that the man excitedly expected to receive a check for $10,000.

Terralynn Hoy, a figure in both the ASD and AVG stories, hosted at least one call for Zeek in 2011. ASD was a $119 million Ponzi scheme that collapsed in August 2008. AVG collapsed in a sea of mystery in June 2009. Before it collapsed, it sought to make an 80/20 “program” mandatory and exercised its version of a “rebates aren’t guaranteed” clause.

Lots of Zeek members tried to encourage fellow members and prospects to keep 80 percent in the “program” and remove only 20 percent. Like ASD and AVG, Zeek also had a version of a “rebates aren’t guaranteed” clause. Some Zeek “defenders” now claim that Zeek should be left alone because it never promised anybody anything. ASD and AVG members said the same thing about those “programs.”

From July 24, 2009: (No. 5 in “Most Popular” rankings last week.) UNCONFIRMED: Harris Family In Uruguay, AVG Staff Fired

This story reported that certain members of the Bowdoin-Harris family involved in both ASD and AdViewGlobal purportedly had moved to Uruguay. News about the purported move broke after AVG was mentioned in a racketeering lawsuit against ASD in June 2009.

From the July 24, 2009, story (italics added):

AVG has a history of blaming members for its problems and deflecting accountability from management to the rank-and-file. In the past, it has blamed members for the suspension of a bank account and threatened to sue members who shared information outside association walls — and even to contact their ISPs to suspend service of people who asked pointed questions about the company in forums.

Yesterday’s announcement by AVG also blamed the delay in audit findings on unspecified “complications created by changes in payment processors.”

Prior to its August 2012 collapse, Zeek appears to have experienced problems with banks and payment processors. Some Zeek promoters cautioned fellow members not to talk too much about Zeek in public. On Aug. 4, Zeek complained on its Blog about unspecified “North Carolina Credit Unions” saying unfair or untrue things about Zeek.

Zeek members were warned there would be consequences to members who did not toe the company line.

Just 13 days later, on Aug. 17, the SEC filed an emergency action in federal court that alleged Zeek was a $600 million Ponzi and pyramid scheme

Dec 10, 2012
EDITORIAL: The ‘Zeek-Step,’ The Stepfordian Shuffle And The Stalinist HYIP

On Jan. 22, 2011, nearly two years ago and long before the SEC brought the Zeek Ponzi scheme case in August 2012, the PP Blog proposed a new term in an effort to distill the economic and logistical nightmares of viral Internet crime to their essence: fraud creep. This followed our Dec. 12, 2010, post, which explained that America’s largest sports stadiums may not be large enough to accommodate all the victims of a single, web-based crime.

Today the Blog is proposing another new term: Zeek-step, also known as “The Stepfordian Shuffle.” Zeek-step gets its name from the collapsed Zeek Rewards “program,” a 1.5.-percent-a-day ROI abomination (with accompanying recruitment commissions) boosted in part by serial MLM racketeers and Ponzi-forum criminals who pretended the 2008 AdSurfDaily Ponzi case never happened.

To do the Zeek-step is to pretend the ASD Ponzi case brought by the U.S. Secret Service more than four years ago is meaningless. At the same time, the Zeek-step is characterized by post-complaint efforts to demonize the SEC and the receiver — and to paint Zeek as a noble enterprise, the sender of a high tide that would lift all MLM boats. The trouble with that claim is that the purported high tide appears to have sunk more than 80 percent of vessels that sought to navigate the Zeek waters.

If you’re a Zeek victim — and if you’re unfamiliar with the ASD case — you should acquaint yourself with it right away. “Programs” such as ASD and Zeek were cancers on the global marketplace. The math of such schemes is approximately this: 86 percent of participants will become “losers” who subsidize enormous “profits” for a super-class consisting of about 14 percent — the “winners.”

There may be 1 million or more victims of Zeek, according to court filings. Putting it another way, Zeek could fill the Rose Bowl to capacity with victims about 10 times over. The logistical challenges confronting the court-appointed receiver in the Zeek case may be unprecedented. So, yes, Zeek was an instance of fraud creep. The ASD case — large for its time four years ago with about 100,000 members — has been dwarfed by Zeek.

Protecting The Super-Class

Although the Zeeks of the world often are positioned as the byproduct of ingenious Democratic Capitalism even as critics incongruously are dismissed as Communists, Socialists, Nazis and enemies of the “free market,” the fact remains that “programs” such as Zeek are designed to channel huge sums to a super-class that largely is preordained. If Zeek were a political entity, this super-class would be seen as a Soviet-era Politburo. The rest of the field would consist of peasants who keep the uppermost Stalinists in fine liquor and cigars.

One of the chief incongruities of “programs” such as Zeek is that “defenders” invariably position themselves as visionary Capitalists and rail against Statism — indeed, it’s axiomatic in HYIP schemes that a government agency that stops a scheme will be described as evil — and yet the “programs” being defended are all about keeping the Stalinists in their Chaikas and dachas.

One way to view Zeek is as a for-profit enterprise that taxed 86 percent of its participants at 100 percent to create the “profits” for the elitist 14 percent. It is likely that some of the people among the 14 percent paid ZERO DOLLARS to Zeek. Zeek was particularly noxious because it planted the seed that MLMers without big lists still could profit by sending the company up to $10,000 and generating a profit over time from an abomination known as the Retail Points Pool.

The SEC said Zeek manipulated the numbers to make that appear possible, to make it appear as though Zeek were a profitable enterprise capable of paying a return of 1.5 percent a day to potentially millions of people. The Secret Service said ASD did the same thing.

Zeek was offensive at many levels, including the intellectual one. Most notable, in our view, is that purported Capitalists “defending” Zeek by railing against alleged Statism as practiced by the SEC don’t seem to make the connection that Zeek set things up to the maximum advantage of the Stalinists of the Electronic Age.

A Ponzi-forum huckster with a big list and practiced in the art of turning blind eye to every HYIP fraud scheme that comes down the pike had a decided advantage over, say, an 85-year-old Florida widow who maxed out her credit card to join Zeek because the huckster caused her to believe she’d have more to leave to her children and grandchildren when God called her home.

It is our hope that the SEC and the U.S. Department of Justice will act aggressively and quickly to oppose a motion filed Friday by certain members of the alleged Zeek Rewards Ponzi scheme to appoint an “examiner.”

Jordan Maglich of PonziTracker has a fine story on Friday’s filing. Could it be true that some Zeekers actually want to further deplete the receivership estate of resources that should go to true victims?

In the PP Blog’s view, embracing a story that Zeek was a legitimate Capitalist venture is to embrace a wicked myth. Hell, Stalin himself might have been the first in, seeing the beauty of how the profits could have propped up the Politburo. If the initial scheme that drove the vast majority of the profits to the elite Statists collapsed, he could simply have announced another five-year plan. PolitburoBids2.com?

Dec 3, 2012